Vermont has no sales tax holiday. Here's why.
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Happy sales tax holiday season to those who celebrate.
As usual, Vermont consumers will not be observing the holiday − in which states waive sales taxes on certain items such as school supplies, clothing and emergency items within a limited price range for a short period − this summer.
Vermonters are not alone, however. Nearby states Maine and Rhode Island are also refraining. Vermont's next door neighbor New Hampshire does not have a sales tax at all.
Massachusetts and Connecticut are the only two states in the New England region that will participate in the holiday this year. Next door neighbor New York also does not have a sales tax holiday planned.
In total, only 17 out of 45 states with sales taxes have had or will have sales tax holidays this year.
Why Vermont doesn't have a sales tax holiday
The Vermont Legislature would have to pass a bill to create the sales tax holiday, and there isn't one currently in the books.
A sales tax holiday "just hasn't been proposed," said Sen. Ann Cummings, D-Washington, chair of the Senate Finance Committee.
Vermont's last sales tax holiday occurred sometime between 2003 and 2011 during Gov. Jim Douglas' administration. Besides Gov. Phil Scott, Douglas was the state's most recent Republican governor.
As for why the holiday didn't continue after Douglas' term ended, Cummings said the country was still recovering from the Great Recession in 2011, despite the recession officially ending two years earlier.
"We were struggling to pay for the services we had," Cummings said, pointing out that Vermont is a small state with a small tax base. "If we don't collect taxes then we have to cut services. It's always difficult to give up revenue in the state."
Rep. Emilie Kornheiser, D-Brattleboro, chair of the House Ways and Means Committee, concurred.
"Any lost revenue is a cut in services for Vermonters and needs to be replaced," Kornheiser said.
A dip in sales tax revenue would mean less money in the education fund, Cummings said. To compensate, Vermont would have to raise property taxes.
Kornheiser added research she's seen suggests purported benefits of sales tax holidays, such as support for local commerce, in reality aren't particularly helpful.
A sales tax holiday "shifts spending patterns but doesn't increase purchasing," she recalled reading.
Kornheiser added that if shopping does increase during the holiday, there's no guarantee that local businesses will be the ones to profit. A Vermont consumer, for instance, could choose to shop online (like at Amazon.com) where many vendors will be based out-of-state.
Despite the cons, could Vermont see another sales tax holiday in the near future?
Cummings doesn't think so.
"Given the present make-up of the Legislature, probably not," she said, adding that she wouldn't support creating a sales tax holiday in Vermont and her committee likely wouldn't either.
"We're in a very different place than we were in the early 2000s," Cummings said. "A sales tax holiday isn't the best solution (to today's economic hardships). If I need to go out and buy a washer and dryer, I can afford to do that. The 6% doesn't make a different in ability."
She added that the Legislature is currently focused on helping the most vulnerable: people experiencing housing and food insecurity.
"We don't tax food or rent, so I doubt that (a sales tax holiday) would help them," Cummings said. "That's the group we're looking at, the group just struggling to cover the cost of living."
Any potential solutions would need to be "more targeted" than a general holiday, Cummings said.
What you can buy in Vermont without sales tax
Even though Vermont doesn't celebrate a sales tax holiday, the state does boast one of the narrowest sales tax bases in the country. In other words, Vermont is one of the states with the least amount of taxed goods.
Below are items that are exempt from sales taxes, according to Vermont's Department of Taxes:
Clothing such as coats, hats, uniforms, shoes and costumes.
Medical equipment and supplies, including "durable medical equipment" like X-ray machines, "mobility enhancing equipment" like canes and wheelchairs and "prosthetic devices" like braces or prescription eyeglasses.
Menstrual care products.
Over-the-counter drugs like aspirin and cough and cold medications.
The following items are taxable in Vermont:
Clothing accessories or equipment, such as costume masks, sewing equipment and supplies, cosmetics, handbags and jewelry.
Soft drinks, such as coffee, tea and water containing sweeteners; energy drinks; and soda like Sprite or Coca-Cola.
Grooming and hygiene products, including soaps, shampoos, mouthwash, toothpaste, antiperspirants, Suntan sunscreens and lotions and cleansing wipes.
Protective equipment, such as face shields, helmets, safety goggles and glasses and breathing masks.
Recreational or sports equipment, such as cleats, ballet and taps shoes, mouth guards and life vests and preservers.
Supplies, such as body massage appliances, hot tubs, medic alert bracelets, household bathroom and baby scales, air conditioners and room humidifiers, and therapeutic foot baths.
Sales tax holiday participants
For those who find themselves visiting other states this summer, make sure to line-up shopping excursions with sales tax holidays.
The following states have sales tax holidays coming up this summer: Connecticut, Maryland and New Jersey.
Connecticut
Aug. 20-26
Exempt:
Non-athletic clothing and footwear, costing no more than $100 per item
Maryland
Aug. 13-19
Exempt:
Clothing and footwear, no more than $100
Backpack/bookbag, but only the first $40
New Jersey
Aug. 26-Sept. 4
Exempt:
Computers, costing less than $3,000
School computer supplies, costing less than $1,000
School supplies
School art supplies
School instructional materials
Recreational or sport equipment purchased for non-business use by individuals
Megan Stewart is a government accountability reporter for the Burlington Free Press. Contact her at mstewartyounger@gannett.com.
This article originally appeared on Burlington Free Press: Vermont lawmakers explain why the state has no sales tax holiday
